The Indonesian state-run tin producer, , has released its results for the second quarter of 2018, which reveal a 31% quarter-on-quarter increase in refined tin production to 7,005 tonnes, although this represented a 12% decline compared to the same period of 2017.

Production of tin ore by the company and its partners in Q2 rose 14% year-on-year to 9,572 tonnes or up 73% from Q1. The company attributed weaker Q1 output to regulation changes and adverse weather conditions.

The tin content of the company’s inventory of tin ore and slags at the end of the quarter rose 17% year-on-year to 13,624 tonnes. Stocks of refined tin fell 17% year-on-year to 3,246 tonnes but were broadly unchanged compared to the end of Q1.

The company continues to see strong growth in its tin chemical and solder businesses with tin chemicals production in the first half of the year increasing 12% year-on-year to 2,971 tonnes and solder production increasing 60% to 627 tonnes. Capital expenditure in H1 also increased by 61% year-on-year to 491 billion rupiahs (~US$30 million) as the company continues to implement tin fuming technology, fund exploration and invest in other installations.

Our view: Weaker production in the first half of 2018 can largely be attributed to export licence and quota issues. However, we expect the company’s production to remain strong for the remainder of 2018, with the company forecasting tin ingot production of 32,638 tonnes, down from its initial production target of 35,500 tonnes. The increased production of tin products is in line with comments made by the Indonesian Minister of State-Owned Enterprises, who has urged such enterprises to develop the country’s value-added downstream sectors.